Measures and causes of centralization of the Internet

Here is a narrative about the Internet that is getting more and more common:

It certainly seems that the Internet is now the realm of a small number of enterprises that dominate this space. This is no longer a diverse, vibrant environment where new entrants compete on equal terms with incumbents, where the pace of innovation and change is relentless, and users benefit from having affordable access to an incredibly rich environment of goods and services that is continually evolving. Instead, today’s Internet appears to be re-living the telco nightmare where a small clique of massive incumbent operators imposes overarching control on the entire service domain, repressing any form of competition, repressing innovation, and extracting large profits from their central role. The only difference between today and the world of the 1970s is that in the telco era, these industry giants had a national footprint. In contrast, these days, their dominance is expressed globally.

Huston, G “Centrality and the Internet”

The core elements of this theory is that the Internet started decentralized and that it then grew more and more centralized around a couple of really big companies. The challenge, this narrative implies, is finding a way back to a more decentralized Internet.

The quote above comes from a post on CircleID by Geoff Huston, who is chief scientist at APNIC, and it goes on to discuss the causes of this centralization. Huston suggests that maybe the economies of scale in advertising are to blame:

It appears that there are very real dynamics of scale in advertising. Advertisers want their message to be seen by the greatest number of potential consumers, and advertising platforms want to provide a service to the greatest number of potential advertisers. The larger the platform, the greater the potential of the platform to meet both of these requirements. The result is intense pressure to consolidate in this market. And that is what we are seeing. And, of course, the Internet is now inexorably entwined in this situation. We wanted the Internet to be “free,” and today, it certainly is. I can use a search engine to query a massive compendium of our accumulated knowledge and more without paying a cent! I can access tools and services for free. I can store all my digital data without cost to me. It sure looks like a “free” Internet to me! But is the inevitable cost of all of this one of overarching centrality and dominance by a small collection of global megalithic enterprises that distorts much of the rest of the global economy?

Ibid.

It is worthwhile teasing out the mental model here — advertising benefits from scale, and so is driven to consolidation and this consolidation also centralizes the Internet as a second order effect.

This is an important and interesting line of thought that deserves to be pursued further, but it also needs to be deepened. There are a number of questions here that I think need to be explored:

  1. How do we measure centralization? Do we get different results if we look at traffic flows, economic flows and time flows? In what dimensions and under what definition is the Internet centralized?
  2. If advertising is driving the consolidation, what drives advertising? Is it the efficient allocation of attention?
  3. Are there other possible models of what causes centralization? A certain centralization is observable in many phenomena – and we can think of this as examples of the 80/20 percent split across nodes and activity / traffic / time in any network.
  4. What is an ideal state? Was the Internet really decentralized or was it just not yet cohesive? An alternative description could be something like: “the early Internet condensed into the current one”.
  5. What other networks have effectively been decentralized? The telcos are not decentralized today, so that is an interesting example.
  6. Do networks decentralize or do they become less central in larger context?
  7. What is the average degree of centralization of human networks?

These questions, and many more would present an opportunity to examine the centralization thesis more in detail. It does seem as if this axis could be an interesting analytical category to look more closely at. We could start by looking at things like the centralization of cities.

More to do.

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